Happy Money releases online product to

help customers lower debtNews and Trends

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WHY UNITED STATES SENATEFedera l C red i t Un ion i s bank ing on a

d ig i t a l makeover

F E A T U R E S T O R Y (Page 7)

CreditunionM A R C H 2 0 2 0

How credit unions push safeguards despite limited

resourcesDeep Dive

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TRACKER®

CONTENTSTABLE OF

ACKNOWLEDGMENTThe Credit Union Tracker® was done in collaboration with PSCU, and PYMNTS is grateful for the company’s support and insight. PYMNTS.com retains full editorial control over the following findings, methodology and data analysis.

WHAT’S INSIDEA look at the recent challenges CUs are facing when digitizing and safeguarding transactions amid limited budgets, as well as how CUs’ close bonds with members could appeal to younger consumers as much as mobile banking apps

03FEATURE STORYAn interview with Timothy Anderson, CEO of United States Senate Federal Credit Union, on how the 85-year-old CU is using a recent digital transformation to protect transactions and keep pace with competitors

07NEWS AND TRENDSThe latest developments from around the credit union space, including FinTech Happy Money’s decision to team with Teachers Federal Credit Union to help customers cut their debts and how technologies like AI are enabling CUs to better fight off fraud attacks

11DEEP DIVEAn exploration of how credit unions are innovating their operations to both defend customers’ data and compete against other CUs and well-funded online financial institutions, despite challenges like limited IT budgets

16ABOUTInformation on PYMNTS.com and PSCU19

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INSIDEWHAT'S

Credit unions (CUs) are digitizing their operations to keep pace with competitors, safeguard transactions, expand online operations and provide current and future members with mobile banking capabilities. They need to meet customers where they are, and many are ac-customed to the convenience and speed of banking on the go. The financial institutions (FIs) that do not keep up with this demand may see their customers switching to competitors.

United States-based CUs do not possess rival banks’ IT budgets, however, meaning they are often already be-hind in the technological innovation race. They may be financially constrained, but CUs’ strong bonds with their members are built on trust and a sense of community

— a significant asset when attracting customers. Six-ty-five percent of credit union members told PYMNTS that trust was the main factor that led them to choose their CUs, 58.4 percent reported being “extremely” sat-isfied with their CUs and 59 percent would stay with their CUs even if the entities were not as innovative as competitors.

The CU-member bond is important, as is offering op-tions and services that members want. Consumers of all generations, especially younger ones, are using mo-bile banking apps, but many also value physical branch-es where they can speak with bankers about matters such as mortgages or personal financial options. Credit unions cannot afford to do away with branches and shift

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to digital offerings, so they must instead meld the two together in a cost-effective way.

Striking a balance between digital and in-person inter-actions is not credit unions’ only problem, though. They must also boost their security, as hacking and fraud remain constant challenges for all FIs. CUs and solu-tion providers are thus turning to blockchain and other emerging technologies that could secure operations and lower overall costs.

AROUND THE CREDIT UNION WORLD

Navy Federal Credit Union recently launched a VoiceID offering for member verification and fraud protection. The CU will integrate the service into its call center, and the feature enables members to create voice prints by recording passphrases that authenticate them on future calls. Navy Federal hopes such personalized security offerings will eliminate lengthy verification processes,

improve call times for employees and reduce unneces-sary frictions.

Other credit unions are teaming up to provide enhanced digital banking support for their members. Vermont State Employees Credit Union (VESCU) recently part-nered with cloud-based financial services provider Lumin Digital and will utilize the latter’s software for business and retail banking. The solution provides a single application through which CUs can organize all online features, supporting more seamless interactions between credit unions and their members.

Emerging technologies could also play a part in pro-tecting CUs’ operations, including products powered by advanced data analytics, artificial intelligence (AI) and machine learning (ML). Such solutions could be key to preventing evolving fraud types, according to Jack Lynch, senior vice president and chief risk officer at credit union service organization (CUSO) PSCU. The group is focused on advancing its Linked Analysis tool,

What’s Inside

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What’s Inside

which uses AI to connected CUs with different platforms and provide better security for transactions between them, merchants and customers.

For more on these stories and other credit union develop-ments, read the Tracker’s News and Trends section (p. 11).

HOW USSFCU’S DIGITAL IT INFRASTRUCTURE MAKEOVER COULD BOOST ITS OPERATIONS

Credit unions in the U.S. are enjoying healthy growth and fostering community-focused relationships with their members, but they face mounting challenges from rivals trying to attract their members and hackers working to steal sensitive data. In this month’s Feature Story (p. 7), Timothy Anderson, CEO of United States Senate Feder-al Credit Union (USSFCU), explains why the Washington, D.C.-based CU is stepping up to the digital challenge with an IT and data storage infrastructure overhaul it hopes will boost its online capabilities and enhance data safety for its high-profile customers.

DEEP DIVE: WHY CUS MUST INNOVATE OR FAIL AMID INDUSTRY CONSOLIDATION

The credit union industry loses one company every four days, mainly to consolidation, meaning they must inno-vate or die after failing to keep pace with the technologi-cal innovations driving the sector. This month’s Deep Dive (p. 16) explores the efforts many CUs are taking to bolster their online and mobile banking app capabilities, defend transactions and provide seamless customer experienc-es for members who are used to quick and convenient banking — with often-limited IT budgets.

INSIGHTEXECUTIVE

“While consumers want quick, easy access to digital ser-vices, they also value security. In fact, according to PSCU’s 2019 Eye on Payments Study, nearly 40 percent of con-sumers agree they make decisions about how to pay for something based in part on which is the most secure. Addi-tionally, seven out of 10 respondents reported using mobile phone alerts to manage their cards, which speaks to the importance of giving consumers the ability to control their banking experiences and providing a feeling of safety when making purchases and conducting transactions with their credit unions.

Exploring different ways to keep members safe — including through authentication, the use of biometrics and artificial intelligence technologies — will ensure consumers and their information are protected. While these tools and solu-tions are important for safety, credit unions also need to keep in mind the member experience when solidifying their authentication tactics. Credit unions should continuously educate their members, explaining why traditional means of authentication are no longer enough to protect account and personal information. The more members know about changes in security and expectations for their day-to-day account activities and how their credit union is working to keep their information protected, the more seamless the experience will be for both parties.”

Consumers want to be able to access digital services quickly and seamlessly, but they also need to feel that their finances are being handled safely. How can CUs strategize when designing digital onboarding and ser-vices to best strike the balance between ease of access and security?

Sean McElroy chief information security officer at Lumin Digital

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What’s Inside

51% Share of FIs that agree eliminating customer frictions is as important as identifying fraud

65% Share of surveyed CU members who say they chose their CUs because of trust

5% Portion of U.S. credit unions that currently offer mobile banking apps

59% Portion of consumers who would stay with their CUs despite a lack of innovation

25% Share of consumers who switched FIs in 2018 after being victimized by fraud

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FEATURE

STORY

H O W A D I G I T A L M A K E O V E R C O U L D B E K E Y T O C U S ’

M E M B E R A C Q U I S I T I O NP L A N S

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Feature Story

Competition for customers — especially millennials — from larger banks and FIs has long required credit unions to keep pace with their more innovative counter-parts. This often means providing digital solutions and convenient banking options despite smaller technology and innovation budgets, however. Security is an ongoing concern as well, with countless fraudsters set on hacking CUs’ to obtain customers’ data.

A digital infrastructure overhaul that boosts CUs’ online presences, accelerates new product and services intro-ductions and improves staff productivity can help CUs expand their customer bases and operations, according to Timothy Anderson, CEO of United States Senate Fed-eral Credit Union (USSFCU). The CU recently revamped its infrastructure to compete against banks and attract more members.

“One of the things that we often say is that we always have to be mindful of protection and security,” Anderson said. “The No. 1 goal is serving our members, obviously, and making sure that we’re secure and safe — especially with all the delivery channels that we offer.”

Serving members means more than releasing products that align with the latest trends. Credit unions must dis-cover where and how their members want to transact and then ensure their in-house growth and innovation strategies match up with those preferences. USSFCU is now working to balance its online and physical presences to better engage with current and potential customers.

ATTRACTING CUSTOMERS WITH UNIQUE BRAND, FINANCIAL STABILITY

USSFCU was chartered in 1935 by nine U.S. Senate em-ployees and now has more than 40,000 members, mostly

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9Feature Story

politicians, their families and staff. The CU also attracts members from across the country, Anderson said, most of whom are interested in USSFCU because of its status as the official credit union of the U.S. Senate.

“That [fact] brings a lot of stability that most other finan-cial institutions don’t enjoy,” he noted. “However, that is the floor where our stability starts, and we have built on that for almost a century. Making measured decisions [on] growth and expansion that ensure we grow at a healthy rate while incurring as little risk as possible has been a longstanding strategy for [us].”

Fraud perpetrated against customers’ personal and fi-nancial data is a major challenge for all FIs, and the in-dustry’s digital push into mobile banking is opening up new channels for both customer interactions and cyber-criminals. CUs need to ensure that their operations are secured if they want to maintain member loyalty.

Credit unions have deep senses of community among their members, meaning that breaches could do incalcu-lable damage to that trust — and to CUs’ bottom lines. USSFCU has taken steps to mitigate such issues, howev-er, sometimes going as far as avoiding sharing data with third-party providers to keep members secure.

“In terms of security, we are pretty much averse to shar-ing member data,” Anderson explained. “I believe [that] things have kind of really evolved. … We take extra pre-cautions, and ... [that] oftentimes means that perhaps we won’t [share data]. ”

That trust has been documented as crucial to success, too. Recent PYMNTS research found that 65 percent of surveyed CU members cite the feeling as the main factor for picking a primary credit union. USSFCU’s high-profile member base has made security even more important, with management often operating under the assumption that USSFCU is constantly under attack to prevent ma-jor problems.

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“Because of who we serve, it goes without saying that member security and protection of member data is of the utmost importance,” Anderson said. “We go to extreme measures to ensure that our data security meets the highest levels and undergoes rigorous testing to ensure what we have in place is impermeable.”

Security issues are always changing, though, and USS-FCU must continually evolve its protections to match those shifts. This includes upgrading its infrastructure to ensure its IT team has the best chance of preventing data-related catastrophes.

DIGITAL MAKEOVER PUSHES SECURITY, NEW SERVICES

USSFCU knew it needed a technological makeover to keep up with fraud’s sophisticated nature and perma-nently provide the necessary levels of security. It part-nered with a cloud infrastructure and digital workspace technology provider to drive its digital transformation and scale its operations, shifting to a “software-defined in-frastructure.” Its partner’s solution includes a converged storage framework that allows USSFCU’s relatively small IT team to securely and rapidly deliver applications and services to customers as well as efficiently manage re-mote branches.

One significant benefit has been that the CU can now expand its online capabilities and innovate more quick-ly. Smaller resource pools may make small opera-tions feel constrained, but Anderson believes many fail at innovation because they lack organizational IT

strategies that prioritize solutions appropriate to the CU and its customers.

“There’s [probably] not a bank or credit union that … doesn’t have mobile banking, so we have the typical mo-bile banking products,” he said. “We’re not looking to have the best products out there, but we’re looking to have products that our members want.”

USSFCU serves more younger customers than one might think, Anderson added. Young pages and interns staff the Senate, and many of them are members of Genera-tion Z. These members are more comfortable with mo-bile banking — meaning credit unions need to offer such options — but they also value branches for informational opportunities.

“Traditional branches are transitioning more to relation-ship centers,” Anderson explained. “They are quickly be-coming less of a place to make transactions and more of a place to engage, inform and educate. … We [plan to] bal-ance these centers with robust online banking and mo-bile app technologies that will allow members to perform almost any function they would need from their device.”

USSFCU and its CU counterparts will be around for a while, especially if they continue to evolve and deliver on their members’ preferences. Digital transformations will help them remain safe and scalable banking destinations for their members, regardless of their members' ages or workplaces.

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TRENDSNEWS &

PARTNERSHIPS AND EVENTS

VSECU, LUMIN DIGITAL TEAM UP ON DIGITAL BANKING SUPPORT

The financial industry is full of CUs looking to build out their platforms to satisfy today’s digital consumers, and Vermont State Employees Credit Union (VSECU) is among them. The FI has partnered with PSCU-owned, cloud-based digital banking provider Lumin Digital to support online banking services. VSECU will utilize Lumin Digital's software for both business and retail banking as well as to provide a single application through which the CU can organize all its online features, enabling seam-less experiences for it and its customers. VSECU hopes

to officially open its digital platform in July and estimates it will have 25,000 users waiting to sign on at that time.

VSECU is just one of several credit unions that PSCU has signed onto the Lumin Digital platform in the past few months. First South Financial Credit Union partnered with the company in February to develop its digital banking platform and create more support for its on-line customers.

HAPPY MONEY ANNOUNCES TFCU PARTNERSHIP FOR INSTALLMENT LOANS

Teachers Federal Credit Union (TFCU) is also working to make its online services more attractive to consumers. The Hauppauge, New York-based CU recently partnered

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with FinTech Happy Money on an online lending product that gives loan recipients more opportunities to build credit and save money. Happy Money utilizes smart al-gorithms to categorize potential borrowers, isolating those that have more potential and desire to eliminate their debt. This allows the CU to approve borrowers that may have higher income levels and thus better chances of paying off their debts.

Happy Money customers have paid off nearly $1.5 billion in credit card debt with these installment loans, according to the company. TFCU has not announced when it will of-ficially integrate the lending service to its online platform, but it hopes the solution will enable it to positively impact its customers’ financial health through eventual savings.

PRIORITY ONE CREDIT UNION MOVES CORE BANKING TO SYMITAR

Pasadena, California’s Priority One Credit Union is turn-ing to the cloud to upgrade its internal banking process-es. The CU plans to use financial services provider Jack Henry & Associates’ Symitar cloud solution for its core banking software, according to a recent press release. The move will allow Priority One to store its internal data in the cloud, better protecting it from fraud and enabling it to provide stronger services and more innovative products, said Charles R. Wigginton Sr., the CU’s presi-dent and CEO.

FIs find cloud technology intriguing because it allows them to keep their data out of in-house servers that may be more easily hacked. They also come with data redun-dancy features that duplicate or otherwise safeguard key data points, which can back up information that may be

lost in hacks or ransomware attacks that lock down serv-ers until firms pay certain amounts.

CUSTOMERS PLACE HIGHER VALUE ON INNOVATION, PYMNTS FINDS

Cultivating customer loyalty is as much a priority for CUs as it is for other businesses, and keeping abreast of con-sumer trends and banking preferences is thus critical. PYMNTS’ Credit Union Innovation Index discovered that what consumers value most from their FIs is changing, with 21.9 percent of customers in 2019 stating they would leave their CUs for another financial company due to lack of innovation. This number was only 17.3 percent in 2018. This 4.6 percent increase is significant and shows that consumers are drawn to financial providers that can keep up with today’s technologies.Nearly 20 percent of current CU customers also reported interest in challenger banks,

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including FinTechs that typically offer more innovative features than other competitors. CUs will need to make note of this trend if they wish to serve today’s tech-sav-vy consumers.

SECURITY AND PAYMENTS

CUNA RECOVERS FROM CYBER LEAK

The Credit Union National Association (CUNA), a trade association for credit unions that advocates for the in-dustry, recently saw a “cyber incident” take its systems offline, proving how necessary it is for FIs and other com-panies to always improve their security approaches. A recent article on the breach noted that ransomware may have targeted CUNA’s systems, though this has yet to be confirmed. A spokesperson for the association noted that the fraudsters only had access to a limited amount

of personal information, including business and email ad-dresses. CUNA does not store data such as credit card de-tails or Social Security numbers, which means sensitive personal identifiers were not available to the attackers.

NAVY FEDERAL CREDIT UNION LAUNCHES VOICEID TO IMPROVE SECURITY, ONBOARDING

Security is a top concern for every FI, and Navy Federal Credit Union is using biometrics to grant its customers an extra layer of fraud protection. The CU announced the launch of its new VoiceID feature, which will enable voice print-based identity verification for consenting cus-tomers, on March 2. VoiceID will be integrated into Navy Federal’s traditional contact center, and customers who wish to use it must enroll in the program. The onboarding process prompts them to select and record passphrases that they repeat on later calls to authenticate themselves.

Navy Federal will still rely on human employees for part of the VoiceID enrollment process. Personalizing security in this manner will eliminate the lengthy verification process and allow calls to happen quicker, which will improve call times and keep members from having to deal with fric-tion-filled authentication tools, according to the CU.

PSCU TESTS OUT BLOCKCHAIN IDENTITY VERIFICATION PROOF OF CONCEPT

Blockchain technologies represent another way for credit unions to add cybersecurity to their platforms, with CUSO PSCU in the process of a proof of concept for such a se-curity offering. PSCU partnered with CU fraud solutions provider CULedger and Baxter Credit Union (BCU) on the proof of concept of CULedger’s MemberPass platform — a blockchain-based service for identity verification.

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News and Trends

MemberPass allows credit unions or CUSOs to have one digital credential that serves as member verification. The partnership will determine how blockchain could help pro-tect customers’ identities and speed transactions.

Blockchain is changing the way data is categorized and stored, making it easier for FIs to protect information and more difficult for fraudsters to access data. PSCU is also planning to invest in similar projects to build out enhanced support for its credit unions through a three-year, $100-mil-lion initiative announced last year.

CULEDGER ADDS NEW CUS TO MEMBERPASS FOR ENHANCED CYBERSECURITY

Other CUs are also interested in blockchain’s security solu-tions, and some are joining PSCU and BCU in the products they are tapping to enhance security. CULedger has added three additional credit unions to its MemberPass service, including Achieva Credit Union, HawaiiUSA Federal Credit

Union and Eagle Express Federal Credit Union. All of its part-ners will be using MemberPass’ existing cybersecurity fea-tures in their contact centers, replacing knowledge-based authentication (KBA)-focused verification features like on-line security questions with blockchain-based cybersecuri-ty solutions. It will also include tools that will authenticate customers on the back-end without their input.

Achieva, HawaiiUSA and Eagle Express will join 11 Mem-berPass platform members, according to the press release. Achieva will complete its implementation later this year, but HawaiiUSA and Eagle Express have yet to provide timelines for their offerings.

DATA ANALYTICS, ML INVESTMENT COULD ALSO AID PROTECTION

CUs must be willing to explore new technologies, including advanced data analytics, AI and ML. Investing in these tech-nologies is a top priority for PSCU, Jack Lynch, the CUSO's senior vice president and chief risk officer, said in a recent interview with PYMNTS. PSCU will continue to advance solutions like its Linked Analysis tool, which uses AI to con-nect credit unions with different platforms and provides more security for transactions among CUs, merchants and customers.

PSCU is far from the only organization implementing ML and similar tools to support CUs. The National Credit Union Administration (NCUA) developed an automated cyberse-curity examination tool that multiple credit unions are utiliz-ing, according to PYMNTS data.

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News and Trends

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COVID-19 IN THE CU SPACE

CUDA PROMISES FLEXIBILITY ON LOANS DUE TO COVID-19

Credit unions are not immune to the new coronavirus pan-demic’s financial and social pressures. COVID-19 has halted many of the typical payment cycles between businesses, customers and FIs, including repayment of loans and creep-ing interest — payments some consumers may have had to forgo due to healthcare costs. Kevin Johnson, CEO of the Credit Union Development Association (CUDA), recently gave a statement to ease stress in this area, noting that “all credit unions will be understanding and will be flexible” toward loan repayment during periods of quarantine and financial strain.

This statement does not promise that all CUs will forgive or halt loan repayments, however, nor that all of them will stop collecting interest. Individual credit unions may respond differently, Johnson added, noting that the best course of action for members may be to call their CUs to determine per-sonalized solutions. Many credit unions are also attempting to gain more clarity from the state and federal government

regarding the pandemic, as what is currently expected of them is still undefined.

COVID-19 FORCES CUS TO SHUTTER BRANCHES

The COVID-19 pandemic is prompting businesses to close many of their physical branches, and CUs are following suit. Minnesota’s largest CU, Wings Financial Credit Union, has shut down three of its 24 in-state branches thus far, but it is allowing consumers to interact with ATMs and personal teller machines at these locations. The latter are equipped with video screens that can be used to interact with tellers, who can walk members through any transactions or finan-cial decisions.

The Minnesota Credit Union Network also released a state-ment requesting that consumers utilize digital banking tools whenever possible rather than ATMs or other machines. Ad-ditional FIs in the state are following this same path, with Bremer Bank shuttering all 80 of its branches and also pro-moting online banking.

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Some financial players may think that digital transforma-tions are nothing more than a past trend. Many banks, businesses and service providers implemented their first digital platforms decades ago and have since steadi-ly built out their solutions with newer technologies like AI-supported customer service channels. Overlooking digital transformations in the present could be problem-atic, however, especially for companies or FIs that did not adopt these innovations as soon as competing entities.

Credit unions have generally been slower to adopt digital services, as less than 5 percent of those in the U.S. cur-rently have mobile banking apps, according to one study. App-powered offerings are becoming the banking meth-od of choice for many consumers — a study found that 97 percent of millennials currently use mobile banking apps. Mobile banking’s personalization capabilities allow con-sumers to set alerts and receive notifications tailored to their individual financial situations, an attractive alterna-tive to branch-based encounters that reduces processes' reliance on paper.

Younger consumers have expressed interest in innova-tive options, but budgetary restrictions and increasing digital fraud concerns may have limited CUs' ability or willingness to modernize. Outdated technologies are likely to redirect potential or existing customers to com-peting services, especially given the rise of online-only competitors and any security lapse's lasting impact. Twenty-five percent of consumers who switched FIs in 2018 did so because they were victims of fraud at their prior institutions, for example. Baby boomers, members of Generation X and millennials all cite trust as the most important factor when choosing their financial partners, and institutions that cannot protect against modern, so-phisticated fraud will surely lose that trust.

Consumers who want seamless, personalized connec-tions with FIs are unlikely to accept any excuses for fail-ing to implement solutions that meet their needs. The following Deep Dive explores why credit unions must adapt and act to protect customers that increasingly pre-fer digital channels.

DIVEDEEP

W H Y C R E D I T U N I O N S ’ STRUGGLES TO GO DIGITAL REPRESENTS

A MAJOR INDUSTRY CHALLENGE

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CONFRONTING DIGITAL LAG

Eighty-six percent of FIs note that digital transformations will fundamentally change the financial industry and how they interact with customers. Only 43 percent have im-plemented digital strategies, however, with the rest — in-cluding some CUs — still playing catch-up. CUs must first truthfully evaluate their current innovation status and their customers' precise expectations before allocating resources towards a digital transformation.

In doing so, these credit unions must identify the chan-nels and technologies that deserve their time and money as well as strategize how best to roll out such features once they are fully developed. Mobile banking applica-tions are especially important, but simply introducing one is not enough to close a technological gap or stand out. CUs must instead tailor their efforts to how cus-tomers want to bank and optimize how their offerings interconnect. In-app banking features can complement a CU with strong physical locations by helping users find convenient branches — a priority among millennials and members of Gen X.

Developing this integrated support is critical to seamless customer experiences, as technologies that do not meet consumers’ evolving standards can frustrate more than help. Approximately one-third of consumers reported re-acting negatively to their FI after being forced to abandon actions on mobile banking apps, for example. Millenni-als, who almost all use mobile banking apps, abandoned such activities on mobile most often: 43 percent did so, while only 25 percent of Gen X customers did the same. Easing mobile frictions could enable credit unions to bet-ter compete against banks and FIs with strengthened digital financial services.

CUs that currently do not offer banking apps must work toward designing, launching and supporting such solu-tions quickly to adequately compete with both existing and emerging players within the financial services space. CUs are not only working to attract members from fel-low credit unions but also from established banks, up-and-coming FinTechs and online-only banks that promise speed and convenience to consumers that clamor for mobile options.

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Deep Dive

CUs must also keep their platforms updated for security purposes. Those still utilizing outdated technologies are leaving themselves open to opportunistic fraudsters hunt-ing for weak points. Credit unions cannot forget about providing satisfying customer experiences when strength-ening their systems, however, as some prospective mem-bers will never finish bank account applications with long authentication processes.

OUTDATED TECHNOLOGY AND FRAUD WORRIES

Credit unions need to both satisfy consumers’ demands and stop fraudsters, but actions to achieve these goals can sometimes complicate FIs' ability to meet their other needs. They must respect their sometimes limited resourc-es and keep costs low while trying to implement newer au-thentication tools such as biometrics. Such operations can drain CUs’ finances — requesting an additional review of a consumer’s credit card application can cost approximately $10, for example — and the time cost for consumers can be major. One study found that three-quarters of the 40 per-cent of consumers who abandoned bank applications did so because enrollment took longer than they would have liked. That data suggests that CUs need to eliminate cus-tomer frictions, which 51 percent of FIs agree is an equal

priority to identifying fraud, even though they must shore up authentication, keep transaction speeds fast and offer reliable online services.

Even selecting a verification technology to develop a streamlined implementation is complicated, as credit unions are abandoning KBA tools because of their growing weaknesses but have yet to settle as an industry on wheth-er AI-enabled tools, biometrics or fraud metrics powered by alternative data sources will replace them.

What is clear is that CUs must make plans and take actions to innovate their digital platforms, regardless of the chal-lenges they face. Consumers tend to view cybersecurity concerns as their FIs’ problems, and they will not wait for their current providers to figure out solutions if a competing entity has already solved the issue. Credit unions that fail to add secure, fast and effective digital features may soon find themselves outstripped by FIs that have launched the solutions their clients and customers demand.

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ABOUTPYMNTS.com is where the best minds and the best content meet on the web

to learn about “What’s Next” in payments and commerce. Our interactive

platform is reinventing the way in which companies in payments share relevant

information about the initiatives that shape the future of this dynamic sector

and make news. Our data and analytics team includes economists, data

scientists and industry analysts who work with companies to measure and

quantify the innovation that is at the cutting edge of this new world.

PSCU is a CUSO supporting the success of more than 900 owner credit

unions representing more than 2 billion annual transactions. Committed to

service excellence and focused on innovation, its payment processing, risk

management, data and analytics, loyalty programs, digital banking, marketing,

strategic consulting and mobile platforms help deliver possibilities and

seamless member experiences. Comprehensive, 24/7 year-round member

support is provided by contact centers located throughout the United States.

The origin of PSCU’s model is collaboration and scale, and the company has

leveraged its influence on behalf of credit unions and their members for more

than 40 years. Today, PSCU provides an end-to-end, competitive solution that

enables credit unions to securely grow and meet evolving consumer demands.

For more information, visit www.pscu.com.

We are interested in your feedback on this report. If you have questions or comments, or

if you would like to subscribe to this report, please email us at creditunion@pymnts.com.

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